The Luxor Capital Group (not related to the Luxor Resort Hotel Casino in Las Vegas) is named the private equity firm that will be granted ownership of the Ocean Resort Casino in Atlantic City. This casino had the most popular sports book in Atlantic City, and that is one reason the firm decided to make the investments.
One stipulation of the contract is that the Luxor Capital Group has to invest $70 million to upgrade various facilities inside the 46-floor property that is valued at $2.4 billion. One reason for this upgrade is so the property can have enough equity to survive during the slow winter months.
This move came after Colorado-based real estate developer Bruce Deifik, and the Deifik family purchased the Ocean Resort Casino from the Revel group with loans/hedge fund interest from J.P. Morgan and Luxor. After the agreement was solidified, full ownership will be transferred to the Luxor Capital Group, and Deifik will hold only a minority stake.
However, the Luxor Capital Group would assume full control when an interim authority is given in about 4 four months. At this time, a trust will be generated that provides the temporary ownership and will continue to follow the terms of the contract as long as the agreed-upon investments are made.
Hopefully, this move would put this casino in a better position to earn a more significant revenue stream since Revel had failed with other properties on the same boardwalk as the Ocean Resort Casino. In recent times, this casino generated a lower amount of revenue at $11 million compared to the average $24 million for other properties in the same area.
The revenue for sports betting, however, keeps rising but is the only gaming option that is keeping the casino afloat. Many suspect that the new owner will do something different compared to the previous three owners, including Revel, to turn things around and keep this great casino on the boardwalk and pumping with fun casino games and sports betting. What is interesting about this acquisition is that it came only several months after the casino reopened its doors last June.
Until a full acquisition happens, the Ocean Resort Casino will still operate as usual during the transition. This decision should not affect general sports betting, depending on what the Luxor Capital Group wants. Hopefully, the new management would breathe some life into the casino.